But the company is back with a surprising plan that sacrifices much, but could offer a gasp of life to the seemingly doomed effort.

The company's filed request with the Federal Communications Commission asks permission to use the 5 MHz of its spectrum that's farthest from the block used by GPS signals. LightSquared agrees, in exchange, to not use the "upper" 10 MHz of the spectrum, saving it as a buffer to prevent interference.

The plan is a painful one for LightSquared -- it is essentially giving up two thirds of its spectrum. But there is an old saying: "Something is better than nothing."

LightSquared is giving up a two-thirds of its spectrum to try to convince regulators to let it use the final third. [Image Source: LightSquared]

That certainly seems to ring true in this case.

The company is currently at a crucial stage in its Chapter 11 bankruptcy, which was filed in May. Alongside the FCC request is a critical plea to the judge in charge of bankruptcy asking to extend to at least last summer the time needed to file an exclusive reorganization plan. The extension would give LightSquared time to see if it can sell the FCC on the buffered spectrum plan and possibly start to monetize the plan, if approved.

There's much at stake for hedge fund manager and former semi-professional hockey player Phillip Falcone. Currently facing fraud charges from U.S. federal securities regulators, Mr. Falcone has also been battling with a group of creditors, whom LightSquared owes $1B USD.

Philip Falcone, one a venture capital wizard, lost nearly half his fortune and is facing fraud charges over the LightSquared mess.
[Image Source: Jacob Kepler/Bloomberg/Getty Images]

According toThe Wall Street Journal, which first broke news of the new FCC request, U.S. Bankruptcy Judge Shelley C. Chapman -- the judge presiding over LightSquared's Chapter 11 -- gave Mr. Falcone a gift when she told the lenders that she would like side with Mr. Falcone. That prompted the lenders to back down from their demands of either selling the embattled firm's remains or for Mr. Falcone to personally repay them. Likely it means that the lenders will now have their debt restructured to reflect on the new fiscal reality facing the telecom.

It's the fourth quarter for LightSquared and the company is down by a couple scores, but the last couple of weeks have suggest that maybe -- just maybe -- it has a comeback left in the tank.